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9 January, 05:17

the simple interest on a certain sum of money for two years at 6% per annum is Rs 900. what will be the compound interest on that sum at the same rate and for the same period?

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  1. 9 January, 05:20
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    Rs 927.

    Step-by-step explanation:

    For simple interest we have:

    I = PRT/100 where I = interest, P = amount invested, R = the rate and T = the time.

    900 = P*6 * 2 / 100

    P = 900*100 / 12

    P = Rs 7500

    The formula for the amount after t years when investing P amount at a rate of r% is:

    A = P (1 + r/100) ^t

    A = 7500 (1 + 6/100) ^2

    = Rs 8427.

    So the compound interest is 8427 - 7500

    = Rs 927.
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